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Okano Company's Management Believes That Every 5% Increase in the Selling

question 20

Essay

Okano Company's management believes that every 5% increase in the selling price of one of the company's products would lead to a 7% decrease in the product's total unit sales.The variable cost per unit of this product is $47.00.
Required:
a.Compute the product's price elasticity of demand as defined in the text.
b.Compute the product's profit-maximizing price according to the formula in the text.


Definitions:

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